I have been in the business long enough to remember when Amgen was the largest and most successful biotechnology company in the world. During most of the 90s and early 2000s, Amgen was second to none. But, a lack of innovation, questionable marketing practices and an uncreative executive management team forced the once invincible biotech Giant to recently stumble and relinquish its world class status
For those of you who may not be familiar with Amgen, it was founded in 1980 by a team of scientists led by George B. Rathmann. The company’s original name was Applied Molecular Genetics which was officially changed in 1983 to Amgen. Its first product, Epogen (EPO; epoetin-alfa) an erythropoiesis-stimulating hormone was approved in 1989 when Gordon Binder was CEO.
EPO quickly became the company’s flagship blockbuster product and was largely responsible for Amgen’s early success. The company’s second blockbuster product Neupogen (Filgrastim) a recombinant-methionyl human granulocyte colony factor (G-CSF)—also under Binder’s leadership—which stimulates neutrophil (white blood cell) production was approved in 1998. In the early 2000s the company—now under the tutelage of its third CEO, Kevin Shearer—introduced a longer acting, second generation EPO product called Aranesp (darbepoetin-alfa) and Neulasta (pegfilgrastim), a second generation, longer-acting PEGylated version of recombinant G-CSF.
The largesse from the EPO and Filgrastim franchises allowed Amgen to rapidly expand in the 2000s and to heavily invest substantial resources into new drug development (both small molecule and biotechnology). Unfortunately, most of these investments did not pan out; with the possible exception of XGEVA (denosumab) and Prolia (denosumab) a monoclonal antibody (MAb) treatment that recently received approval for the treatment of skeletal-related events including pathological faction in patients with bone metastases from solid tumors and postmenopausal osteoporosis respectively.
In the 2000s, Amgen’s went on something of a “buying spree” during Mr Shearer’s 11 year tenure at the company. During this time Amgen acquired eight companies including three high profiles and well known ones; Immunex (2002) a MAb development company; Tularik (2004) a small molecule discovery company and Abgenix (2006) another MAb development entity. The Immunex acquisition, clearly the most profitable one, gave Amgen access to Enbrel (etanercept) a tumor necrosis factor α MAb indicated for the treatment of various forms of arthritis. Enbrel is currently one of the world’s top selling biotechnology products.
Despite its lack of R&D productivity, Amgen was recognized until recently as the world’s largest and most profitable biotechnology company in the world. However, its lack of R& D productivity coupled with a recent, highly publicized regulatory and criminal inquiry into inappropriate marketing associated with its EPO franchise has seriously tarnished the company’s once impeccable reputation. Interestingly, it appears that Amgen is finally attempting to reinvent itself.
Last week, the company announced that its CEO, Kevin Shearer and Dr. Roger M. Perlmutter, head of R&D will retire early next year. Mr. Shearer will be succeeded by Robert Bradway, a former Wall Street executive who is Amgen’s current chief operating officer. Dr. Perlmutter will be replaced by Sean Harper, MD, the company’s chief medical officer. And, last month, Amgen announced that it plans on buying back up to $5 billion shares of its publicly-held stock in an attempt to return profit to shareholders. Finally, today, the company announced that it entered into a deal with Watson Pharmaceuticals, a leading generics company, to develop biosimilar versions of some of its competitor’s blockbuster cancer-fighting biotechnology drugs. The press release made it clear that the deal did not include developing biosimilar versions of any of Amgen’s currently marketed biotechnology products. Nevertheless, today’s announcement strongly suggests that Amgen is willing to use anything at its disposal (in this case its substantial expertise in biomanufacturing rather than new drug development) to generate additional revenue streams for the company.
The recent organizational changes and strategic decisions made by Amgen’s board of directors and management team tends to validate the need for change at the company so that it can remain profitable and possibly restore its reputation as a global biotechnology leader. That said, like most other things in life, only time can tell!
Until next time…
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